Breather For Anil Ambani's RCom, Lenders Give 7 Months To Complete Deals
Mumbai: Reliance Communications (RCom), battered by concerns over its debt burden, said on Friday it plans to complete deals to sell part of its wireless and tower business by September 2017, three months before a deadline set by its lenders. Reliance Communications is working to merge its mobile services division with rival Aircel and is selling a stake in its mobile masts subsidiary to Canada's Brookfield. Reliance Communications said that the merged entity with Aircel will be called Aircom and will hold 50 per cent stake in the new entity.
Anil Ambani, chairman of Reliance Communications, added the company's lenders had accepted a company-proposed overhaul plan and given the group until December to conclude the process. He added lenders would allow the company to pause debt repayments until December.
Reliance Communications' lenders will have right to exercise all their options once 7-month standstill period is over in December, Mr Ambani said, adding that the telecom company may look at strategic sale of its global business further pare down debt.Â
Mr Ambani said that the debt burden will be reduced to Rs 20,000 crore from Rs 45,000 crore with two deals by September. "Both the transactions, we believe, will lead to a reduction of Rs 25,000 crore of debt, which is 60 per cent by just two transactions," he added.
Mr Ambani, 57, was addressing the media to reassure investors after worries over the mobile carrier's heavy debt load rattled markets and triggered ratings downgrades.
Once the flagship in his business empire, Reliance Communications has seen its market value slashed by a third after shares have plunged since May 5 when ratings agency ICRA downgraded its debt over concerns about its profitability and debt loads.
The loss has reinforced concerns about Reliance Communication's ability to service nearly $7 billion of net debt - including local and foreign currency loans and bonds - or more than nine times its operating earnings for the year to March. Reliance Communications reported its first full-year loss last month. New entrant Reliance Jio has added to the intense competition in the sector and triggered a price war.
Mr Ambani said that Reliance Communications will make efforts to restore the credit rating of its debt.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
-
Joining The Dots | Dark Skies, Steady Diya: Why Hope Holds This Diwali
With war, a weak rupee and foreign outflows weighing on sentiment, policymakers at the NDTV World Summit and market veterans at NDTV Profit Ignite: Diwali Edition offered the same advice: stay invested and filter out the noise.
-
The Curious Case of Equitas Small Finance Bank And A CEO Who Quit For Stock
PN Vasudevan believes persistent investor concerns over a perceived conflict of interest had become a governance overhang on Equitas Small Finance Bank's stock, even as the lender improved profitability and asset quality.
-
Talking Points This Week: AI Cash Burn, A Tiger Comeback And An India That Still Finds Its Own Path
India is not immune to higher oil or tighter global liquidity, yet its earnings base is broader, its domestic policy levers are still available.
-
Foreign Investors Own Half Of HDFC Bank and ICICI Bank. An LTCG Cut Could Matter Most Here
Foreign portfolio investors have US$115 billion parked in HDFC Bank, ICICI Bank. If the government cuts long-term capital gains tax, Jefferies says returning foreign money could land here first.
-
'Never Seen This Level Of Negativity': Sandeep Tandon Says The Next Rally May Be Closer Than You Think
Veteran investor Sandeep Tandon says foreign selling is easing, large-caps are due a comeback and mid-caps are crowded, while he turns positive on gold, power and pharma this Diwali.
-
Indians Stay With Family, Not In Hotels | The Reason Why
India still lacks enough clean, reliable and affordable hotels for budget-conscious travellers.
-
The Economic Imperative: Analysing The Material Driving Force Behind India-Canada Strategic Reset
This economic complementarity is further reinforced by deep institutional investment ties and talent mobility, which form the bedrock of the bilateral framework.
